Alaska Employment Law

In a case arising from the Seventh Circuit, the United States Supreme Court has been asked to resolve when and whether a subordinate’s impermissible motive may be imputed to an employer in an employment discrimination case. The case is Staub v. Proctor Hospital, 560 F.3d 647 (7th Cir. 2009). 

Staub is an Army reservist.  He filed suit under USERRA after he was terminated, alleging that he was terminated because of an anti-military bias.  There was substantial evidence that mid-level supervisors resented Staub’s military-related absences.  However, the actual decision to terminate Staub was not made by these managers and was made for a reason that had been independently investigated.  A jury returned a verdict for Staub.  On appeal, the Seventh Circuit reversed.  The court concluded that the hospital’s decision was not “wholly dependent on a single source of information” and that it had conducted its own investigation into the underlying circumstances.  The court reversed and remanded with instructions to enter judgment in favor of the hospital. 

Staub has now sought certiorari.  On November 9, 2009, the United States Supreme Court asked the Solicitor General’s Office to submit a brief expressing the views of the United States.  Many commentators believe that the Court may be inclined to accept review because the “cat’s paw” theory narrowly escaped review a few Terms ago when a case for which certiorari issued, EEOC v. BCI Coca-Cola Bottling Co. of LA, 450 F.3d 476 (10th Cir. 2006), ultimately settled before the case could be heard.  

The “cat’s paw” theory of employment discrimination examines when and whether an employer may be liable for discrimination based on acts or omissions of a subordinate who did not make the actual decision that is being challenged, but who may have affected the decision. It is a literary allusion to Jean de La Fontaine’s fable “The Monkey and The Cat,” in which the monkey uses the cat to pull roasting chestnuts from a fire. The allusion is now archaic both on its facts and context (few of us have ready familiarity with seventeenth century French poets), but the name remains all the same.

Over the years various “cat’s paw” tests have been adopted.  Depending on how one interprets precedent, there are anywhere from two to perhaps as many as five different tests.  In my own view, there are two major competing tests each of which gives rise to slightly varying tests that are functionally similar. 

One test (the functional decision maker test) essentially examines whether the subordinate significantly affected the ultimate decision. A subordinate’s impermissible motive is imputed to the employer only when the subordinate dominates the underlying investigation and the ultimate decision is little more than a rubber stamp reflecting the subordinate’s animus.   This is the test used in the Fourth and the Seventh Circuits.

A second test (the causation test) looks at the overall chain of events and related circumstances.  A subordinate’s animus may be imputed to an employer if the plaintiff can show that the subordinate “influenced or was involved in the decision or decision making process.”  This is the test that is applied in the Ninth Circuit.  See Poland v. Chertoff, 494 F.3d 1174 (9th Cir. 2007).The First, Second, Third, Fifth, Sixth, Eighth, Tenth, and Eleventh Circuits also apply what appears to be the same test or varying forms of the same test.

At present significant questions remain concerning how employers may insulate their decisions from unknown biases harbored by subordinates.  Employers should be able to screen out improper motives by taking steps to ensure that their decisions are fair in form and function—for example, by trying to reach objectively impartial decisions based on reasonable investigations.  This begs the question, however, of what constitutes a “reasonable” investigation?  Does it imply traces of due process principles that would otherwise not constrain private employers’ decisions?  See, e.g., BCI, 450 F.3d at 488 (employer should ask employee “for his version of events”).  It is also unclear whether the same principles will apply to large and small employers.  These and other wrinkles will have to be ironed out in the future.  Staub may be the appropriate vehicle for the Court to resolve the current Circuit conflict.